The use of cryptocurrency in some commercial and social transactions online is no longer news as it’s emergence into the financial system Has been welcomed by millions of users across the world.
To start with, Cryptocurrencies let you buy goods and services, or trade them for profit. Here’s more about what cryptocurrency is
A cryptocurrency (or “crypto”) is a digital currency that can be used to buy goods and services, but uses an online ledger with strong cryptography to secure online transactions. Much of the interest in these unregulated currencies is to trade for profit, with speculators at times driving prices skyward.
The most popular cryptocurrency, bitcoin, has had volatile price moves this year, reaching nearly $65,000 in April before losing nearly half its value in May. By mid-October, the price had risen rapidly again: it hit an all-time high above $66,000 before falling back depending on what direction the trade chart is moving.What You Should know.
Cryptocurrency is a form of payment that can be exchanged online for goods and services. Many companies have issued their own currencies, often called tokens, and these can be traded specifically for the good or service that the company provides. Think of them as you would arcade tokens or casino chips. You’ll need to exchange real currency for the cryptocurrency to access the good or service.
Cryptocurrencies work using a technology called blockchain. Blockchain is a decentralized technology spread across many computers that manages and records transactions.
What are they worth?
More than 14,500 different cryptocurrencies are traded publicly, according to CoinMarketCap.com, a market research website. And cryptocurrencies continue to proliferate.
The total value of all cryptocurrencies on Nov. 19 2021, was more than $2.5 trillion, having fallen off an all-time high above $2.9 trillion days earlier. The total value of all bitcoins, the most popular digital currency, was pegged at about $1.1 trillion.
Best cryptocurrencies by market capitalization
These are the 10 largest trading cryptocurrencies by market capitalization as tracked by CoinMarketCap, a cryptocurrency data and analytics provider.
Cryptocurrency Market Capitalization
Bitcoin $1.1 trillionEthereum $492 billion
Binance Coin $94.3 billionTether $73 billion
Solana $62.1 billionCardano $61.7 billion
XRP $49.8 billion
Polkadot $40.1 billion
USD Coin $34.4 billion
Dogecoin $30.5 billion
Data current as of Nov. 19, 2021.
Why are cryptocurrencies so popular?
Cryptocurrencies appeal to their supporters for a variety of reasons. Here are some of the most popular:
* It’s easy to use
* makes transfer of value easier and faster.
* It improves the standard of online transactions
* Supporters see cryptocurrencies such as bitcoin as the currency of the future and are racing to buy them now, presumably before they become more valuable
* Some supporters like the fact that cryptocurrency removes central banks from managing the money supply, since over time these banks tend to reduce the value of money via inflation
*Other supporters like the technology behind cryptocurrencies, the blockchain, because it’s a decentralized processing and recording system and can be more secure than traditional payment systems.
*Some speculators like cryptocurrencies because they’re going up in value and have no interest in the currencies’ long-term acceptance as a way to move money.
Are cryptocurrencies a good investment?
Although Cryptocurrencies may go up in value, but many investors see them as mere speculations, not real investments.
The reason? Just like real currencies, cryptocurrencies generate no cash flow, so for you to profit, someone has to pay more for the currency than you did.
That’s what’s called “the greater fool” theory of investment. Contrast that to a well-managed business, which increases its value over time by growing the profitability and cash flow of the operation.
“For those who see cryptocurrencies such as bitcoin as the currency of the future, it should be noted that a currency needs stability.”
Some notable voices in the investment community have advised would-be investors to steer clear of them. Of particular note, legendary investor Warren Buffett compared bitcoin to paper checks: “It’s a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money too. Are checks worth a whole lot of money? Just because they can transmit money?”
In the same vein, it should be noted that a currency needs stability so that merchants and consumers can determine what a fair price is for goods. Bitcoin and other cryptocurrencies have been anything but stable through much of their history. For example, while bitcoin traded at close to $20,000 in December 2017, its value then dropped to as low as about $3,200 a year later. By December 2020, it was trading at record levels again.
This price volatility creates a conundrum. If bitcoins might be worth a lot more in the future, people are less likely to spend and circulate them today, making them less viable as a currency. Why spend a bitcoin when it could be worth three times the value next year?
How do I buy cryptocurrency?
To buy cryptocurrencies, you’ll need a “wallet,” an online app that can hold your currency. Generally, you create an account on an exchange, and then you can transfer real money to buy cryptocurrencies such as Bitcoin, Ethereum, Tron, BNB, Dogecoin, Shiba inu, Litecoin Ripple and many others.
where you can create both a wallet and buy and sell bitcoin and other cryptocurrencies. Also, a growing number of online brokers offer cryptocurrencies, such as eToro, Tradestation and Sofi Active Investing. Robinhood offers free cryptocurrency trades (Robinhood Crypto is available in most, but not all, U.S. states).
Some mobile applications that offer wallets services to help it’s users procure sell and buy crypto Currency are as follows Trust Wallet, Meatmask , Atomic Wallet and many more Are cryptocurrencies legal?
There’s no question that they’re legal in the United States, though China has essentially banned their use, and ultimately whether they’re legal depends on each individual country. Also be sure to consider how to protect yourself from fraudsters who see cryptocurrencies as an opportunity to milk investors.
As always, buyer beware.
Ensure that you secure your crypto transactions in other to be free from harm.
What online brokers offer cryptocurrencies?
The following are online brokerages that currently offer cryptocurrencies.
US Access to buy and sell nearly 60 cryptocurrencies.
Access to buy and sell nearly 100 cryptocurrencies.
Trading platform with access to 17 cryptocurrencies.
Ability to buy and sell more than 50 cryptocurrencies.
Seven cryptocurrencies including bitcoin, bitcoin cash and ethereum.
SoFi Active Investing
Offers more than 20 cryptocurrencies for trading including bitcoin, ethereum and litecoin.
Offers trading for five cryptocurrencies, including bitcoin, bitcoin cash and ethereum.
Offers 10 cryptocurrencies for trading, including bitcoin, bitcoin cash, ethereum and litecoin.
Kraken Offers more than 90 cryptocurrencies.